What is Copy Trading? | How to Do It, Advantages and Considerations

What is Copy Trading? | How to Do It, Advantages and Considerations

Copy Trading is a trend that is booming. This due to its multiple advantages and benefits. If you have your own business or company, you will want to know what it is about. If you want to venture into this world, do not stop reading. Next, we will tell you how to do it, what are its advantages and the considerations that you should take into account.

What is copy trading?

Copy trading, also mentioned and called social trading, is a strategy to carry out investment operations, based on what we will call a real strategy. This real strategy is the set of movements and operations that have generated significant profits, through some other trader with a track record and extensive experience in the world of trading.

Through this, it is observed and considered that some other broker or trader is successful in their operations, thus obtaining great results. The best thing about this is that you can copy its way of operation. You can replicate each of his movements (real strategy) to, in this way, obtain more chances of winning in each investment movement, since it will be based on the successful movements made by different traders. Which they themselves recommend, having an increase in the movement history of months and even years, depending on what is allowed by the platform. This strategy is called copy trading.

How to copy trade forex?

Actually, applying or making use of this strategy is less complex than is believed. Its name explains everything and, as mentioned above, it is a strategy based on copying and recreating someone else’s steps or movements. Here are the steps to follow to learn how to copy trade and find the best forex copy trading platform:

  • Investigate, study and investigate, according to your funds, appreciations and goals, what could be the best forex copy trading platform for you. What must be done is the registration, since you must register and identify yourself as a broker.
  • The first deposit must be made if you are new to the platform you want to trade on. Thus, you can have funds in your portfolio that support the movements.
  • You must search and choose the broker from which the movement guide will be taken. Next, it is suggested to study and learn about the special and important data of the broker. Data such as the history, the profile, the movements, the number of followers, the time it has been operating on the platform, and the capital that has been invested. It is important and it is suggested to choose several brokers, since by staying and following a single one that operates with all your funds with the same broker, thus reducing possible losses.

Potential advantages of using platforms such as forex in copy trading strategies:

  • The first and most important thing is that when you start operating in this way, you will begin to have important and special information from a broker or trader to which you are replicating movements.
  • You will find a wide variety of tools, whether from the trader’s or broker’s movement history, the number of followers who also trade based on their movements, different types of strategies suggested by them, and recommendations on how long you should be trading on the platform. platform.
  • It is ideal for people who lack time and experience in studying operational strategies. Who will be able to replicate and make use of the strategies and movements proposed by expert traders.
  • A community of traders is established. This facilitates the work and approach of novice traders. Thus facilitating the operation and systematization of information, since you can study and observe movements and strategies of experienced traders.

Important considerations when copy trading:

It is important to note that the funds in your account are indirectly related to the funds of the chosen broker. This means that the experienced broker will be able to replicate your moves using a fraction of your funds solely for your benefit.

You will be able to operate by opening or closing positions, also establishing closing limits, being able to establish both profit and loss margins, reducing any possible loss.

The experienced broker will offer advice and guidance, thus obtaining a commission with some percentage of the profits from the movements. The latter will depend solely on the consideration of the broker. It is important to know that replication and monitoring of the broker’s movements can be withdrawn at any time, thus continuing with an individual strategy.